India Cements Q3 net up seven fold to Rs 133 crore on sale of subsidiary

Revenue rises 10%; company lines up Rs 1,600 cr plan to revamp old plants

Chennai-based India Cements (ICL) has posted a seven-fold rise in consolidated net profit to Rs 133.29 crore during the third quarter of the financial year 2022-23, up from Rs 16.24 crore during the same period last financial year, driven by the gains from the sales of its subsidiary Springway Mining. The company is also set to come up with a Rs 1,600-crore project to refurbish all the old plants, as a move to improve operational efficiency.  

The company’s revenue from operations was up by over 10 per cent to Rs 1,281 crore during the quarter under review, from Rs 1,160.63 crore during the third quarter \the previous financial year. For the quarter under review, the overall volume of clinker and cement for the company was 2.182 million tonnes, up 3 per cent from 2.108 million tonnes during the year-ago quarter.

The surge in profit in Q3FY23 was on account of the profit on sale of investments at Madhya Pradesh (Springway Mining) for Rs 294 crore, the company said. The cost per kilo calorie of fuel rose from Rs 1.95 per Kcal to Rs 2.95 per Kcal during the quarter under review on a year-on-year basis.

“During the quarter, higher costs continued and we are taking steps to reduce these higher costs,” said N Srinivasan, vice chairman and managing director of India Cements.

To improve operational efficiency, the firm plans to refurbish all its units, save Sankari in Tamil Nadu and Banswara in Rajasthan. The efficiency project will start from Vishnupuram and Malkapur in Telangana and will extend to other units. This may entail a total investment of Rs 1,600 crore, to be raised mainly from land monetisation. The company is in the process of identifying land parcels from the 26,000 acres it owns, Srinivasan said. ICL has already engaged Krupp Polysius and FLSmidth to look into the process of refurbishment. It has plants of various vintage and technology, with varying parameters of power and fuel. Hence the impact on cost of production on account of increase of coal and diesel prices was much higher as compared to some of the peers, the company said.